Oil's Russian-Roulette Trade

The spread between West Texas Intermediate and Brent Crude widens and narrows depending on the capacity of a single pipeline.

A hiccup in an oil pipeline in Texas earlier this year has revived a very popular and profitable bet of the past two years. However, the strategy focuses on the peculiarities of a single pipeline—and it's not for the faint of heart.

In 2011, many speculators pocketed sizable gains by wagering that the price gap, or spread, would widen between the world's two benchmark crudes: West Texas Intermediate,...